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Shuttered Ohio Plant Redeveloping Into Large-Scale Oil, Gas Service Terminal

Work is underway at the former Ormet Corp. aluminum smelting plant straddling Ohio and West Virginia to transform the 1,700 acre site into a large-scale port and central service terminal for the oil and gas industry operating in the region.

Ormet shuttered the plant in October 2013 after facing low aluminum prices and climbing electricity rates, putting more than 1,000 people out of work. The company later filed for Chapter 11 bankruptcy protection and sold the property to Wisconsin-based Niagara Worldwide LLC, which bid $25 million for the property.

Niagara President Eric Spirtas toldNGI's Shale Daily that his company, which specializes in property redevelopment and facility operations, among other things, originally envisioned a service terminal for the Appalachian Basin's booming oil and gas industry when it purchased the property.

"Absolutely," he said when asked if the Utica and Marcellus shales had any influence on Niagara's decision to bid for the site. "This is what I do -- demolition. It's a matter of asking interested parties ‘what do you need and when do you need it?’"

Oilfield service companies and others have already scheduled storage at the site before the region's first snowfall, Spirtas said, while well equipment is soon expected to be staged there and demolition is underway to make room for services that will support sand, limestone, chemical and water handling operations.

Niagara is holding an auction this week to sell-off hundreds of pieces of rolling stock, transformers, service items and other equipment from Ormet's operations. Spirtas said 20 interested parties, all of which are related to the oil and gas industry, have stepped forward about operating at the plant. Negotiations have already started with some of those parties, and Spirtas said he met with a "large gas processing" company over the weekend.

Located in Hannibal, OH, along the Ohio River, the site is ideally suited for an oil and gas service terminal, Spirtas added. It's already home to 52 dock slips for barges, railway and highway access, while material handling equipment and water treatment are available as well.

Niagara has hired a port manager and will operate the facility, Spirtas said. The company's plans are the latest in a series of similar projects that have revitalized the region’s brownfield sites that once served its dominant steel industry and other industrial operations.

Pittsburgh-based Esmark Inc. is currently retrofitting a shuttered cold rolling steel mill in Yorkville, OH, to support oil and gas companies with water treatment, dry storage and water handling services (see Shale DailySept. 11). In July, Concord Energy LLC opened a truck-to-rail transloading facility in Parkersburg, WV, capable of handling more than 150,000 bbl of crude oil, condensate and natural gas liquids (see Shale DailyJuly 15). GreenHunter Water LLC, meanwhile, has plans to construct a $1.7 million water treatment, recycling and condensate handling logistics terminal in Wheeling, WV, at a former gasoline storage facility there (see Shale DailyFeb. 6).  

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